Case Report: Longwood Security Class Action Notice Mailed

Yesterday 812 former and current security officers were mailed a notice informing them that (1) there is a pending case against Longwood Security Services, Inc. for unpaid wages, (2) the court certified the case as a class action, (3) they are class members, and (4) that we are the lawyers for the class (Nicholas F. Ortiz and Elizabeth Ryan, co-counsels). The case is based on Longwood’s practice of deducting pay from hourly security officers’ wages despite those officers being required to perform job duties during those breaks, such as remain on site, stay in uniform, monitor radios and respond to calls. Also, those officers were often so busy during shifts that taking any kind of break was very difficult or impossible.

A copy of the notice can be viewed here: Longwood Wage Class Action Notice. If you got a copy of the notice, or think you should have, and want to talk, please feel free to give us a call.

Case Report: Wage Act Class Action Against Restaurant Chain Can Proceed

The Massachusetts State Superior Court issued an opinion on Jan. 5, 2016 allowing a class action for unpaid meal breaks to proceed against the Chateau restaurant chain in Massachusetts.

Elizabeth Ryan of Bailey & Glasser and I are co-counsel in this case and jointly representing the putative class.

Interestingly for employment law practitioners in Massachusetts, this is the first time a Massachusetts state court has adopted the “single integrated employer” theory. Because each Chateau restaurant is separately incorporated, the defendants argued that we should only be allowed to sue the named plaintiff’s direct employer (the restaurant where he worked) and shouldn’t be allowed to to include employees from the other restaurant locations in the class. The defendants argued that in order to be able to include the other restaurants, we should have to pass the “joint employment” test, while we argued that the more-streamlined “single integrated employer” test should control.

The Court agreed with our side and ruled that the case could proceed because the individual restaurants and the chain were so integrated with one another that all could be liable as a single integrated employer despite being nominally separate business entities.

The case is Fitzgerald v. The Chateau Restaurant Corp., Case No. 14-01990-J (Middlesex Superior Court). The opinion is attached here.

Massachusetts Employers Cannot Charge Employees For Uniforms

Many employers in Massachusetts require their employees to wear uniforms. While this is a legal practice, it is unlawful for employers to charge employees for these uniforms.

In January 2015, the Department of Labor Standards updated its wage and hour regulations. The new regulations, now located at 454 CMR 27.05(4), prohibit employers from passing on the costs of uniforms to employees:

(4) Uniforms. For employers requiring uniforms, the following shall apply:

(c) An employee or prospective employee who is required to purchase or rent a uniform shall be reimbursed for the actual purchase or rental cost of the uniform.

The old regulations did not contain this language and seemingly permitted employers to deduct the cost of uniforms from employees’ wages. They read:

(3) Deductions and the Calculation of Overtime. Where deductions are made from an employee’s wages for meals, lodging, or uniforms, the employee’s regular hourly rate used to calculate overtime compensation shall be the employee’s hourly rate before any deductions are made.

In short, Massachusetts law now bars employers from passing on the expense of uniforms to employees. Employees who are required to pay for uniforms can recover triple damages in a lawsuit, which may be brought as a class action.

If your employer requires you to pay for your uniforms – or does not reimburse you for the expense of purchasing a uniform – call us at the number above or email us at info@masswagelaw.com for a free consultation.

Auto Deductions for Work Breaks

Lunch breaks – and other breaks – are a normal part of most employees’ work days. Under Massachusetts law, M.G.L. c. 149, s. 100, employers must provide employees with a thirty-minute meal break after working for six consecutive hours. Many employers provide longer breaks, such as one hour for lunch. When an employer provides an employee with any break that is longer than 20 minutes, it may be paid or unpaid.

However, the break must be paid if, during the break, the employee performs work, is assigned work duties, or is required to remain at the job site.
Many employers give employees breaks by using a shortcut. Rather than have employees clock in and clock out for breaks, they automatically deduct time from employees’ hours each day. These “auto deduct” or “auto deduction” policies often result in employees going unpaid for work they perform. The Massachusetts wage regulations at 454 CMR 27.02 define compensable “working time” as follows:

Working Time. Includes all time during which an employee is required to be on the employer’s premises or to be on duty, or to be at the prescribed work site or at any other location, and any time worked before or after the end of the normal shift to complete the work. Working time does not include meal times during which an employee is relieved of all work-related duties.

This means that, when employees work through lunch, are assigned duties during their break periods (such as answering a phone or radio), or are prohibited from leaving the job site during the meal break, they must be paid wages for that time. Yet, because many employers utilize inflexible, automatic time deduction policies that do not take into account work during lunch breaks, these wages often go unpaid.

Auto deduct policies also regularly collide with employers’ recordkeeping duties. Massachusetts law, as set forth at 454 CMR 27.07(2), requires that the employer – not the employee – keep a true and accurate record of all time worked:

For each employee, the employer shall keep a true and accurate record of the employee’s name, complete address, social security number, occupation, amount paid each pay period, hours worked each day, rate of pay, vacation pay, any deductions made from wages, any fees or amounts charged by the employer to the employee, [and] dates worked each week …

An employer’s obligation to keep a record of all hours worked means that the employer must keep track of hours worked during lunch. If the employer knows – or would know through reasonable inquiry – that an employee is working during a break, it must pay the employee wages for that time. Because it is the employer’s duty to accurately record time, the employer cannot avoid paying wages by blaming the employee for failing to report the time worked.

If you perform work, are assigned duties, or are prohibited from leaving your job site during your lunch break, feel free to contact us to confidentially discuss your situation and your rights with one of our employment law attorneys.

Overtime for Car Sales in Massachusetts

Most salespeople who work in car dealerships are paid on commission, or receive a base salary plus commissions. A common misconception is that these salespeople are exempt from receiving overtime wages. This is not true. Car salespersons are entitled to overtime pay even when they receive salary and commissions. Salary paid and commissions earned do not count towards the employer’s obligation to the pay the salesperson premium overtime pay. The employer must separately pay employees earned overtime wages.
Under Massachusetts law, car salespersons are entitled overtime. This means that for every hour worked in excess of 40 in one work week, a car salesperson must be paid at one and one half times their regularly hourly rate. Premium pay for overtime hours is in addition to salary and commissions.

The Department of Labor Standards recently updated its regulations to clarify this rule. According to the DLS, a car dealership must pay its sales staff at least the minimum wage for the first 40 hours they work each week. The minimum wage is Massachusetts is currently $11.00 per hour, meaning that a salesperson who works 40 hours per week must earn at least $360 (before taxes) each week.
If a salesperson earning the minimum wage works more than 40 hours in a week, the employer must pay the employee one and one-half times the employee’s regular rate of pay ($11.00 per hour), or a total of $16.50 per hour for all hours over 40, regardless of how much the employee earns in commissions that week.

If the salesperson instead earns a salary and commissions, the employer must still pay the employee one and one-half times their regular rate of pay. A salaried employee’s regular hourly rate is calculated by dividing the amount of salary received in a week by the number of hours worked in that week. For example, an individual receiving $600 per week in salary who works 50 hours in the week has a regular hourly rate of $12 per hour. The employer must pay that employee $18.00 per hour (1.5 x $12.00) for each hour worked over 40, even if that employee earns commissions that exceed the earned overtime wages.

If an employer fails to compensate its employees for overtime pay, the employer is liable for treble damages, meaning the employer must pay the employee three times the amount of withheld wages.

If you work as a car salesperson and do not receive overtime pay, or receive less than the minimum wage, feel free to call us to speak with an attorney about your rights.

Mary Kay Misclassification Lawsuit

Mary Kay beauty consultants and sales directors in New Jersey recently filed a class action lawsuit against Mary Kay, claiming that the company has misclassified them as independent contractors rather than employees, in violation of the New Jersey Wage Payment Law.

In Massachusetts, Mary Kay representatives may be misclassified. Massachusetts law makes it difficult for an employer to lawfully classify a worker as an independent contractor. A worker can only be classified as an independent contractor if the employer can prove all three of the following prongs of the independent contractor test:

A. That the worker is not subject to the employer’s direction and control;
B. That the worker does not provide the same type of service to the employer that the employer provides to the general public; and
C. That the worker operates an independent business of the same nature as the work he or she provides to the employer.

Depending on the facts, Mary Kay representatives in Massachusetts may be subject to the direction and control of the company, under Prong A above. Not only do beauty consultants receive job training from the company, but Mary Kay may also require them to purchase fixed amounts of products from the company, and to purchase various pamphlets and other marketing materials directly from the company. Beauty consultants may also be required to purchase and wear uniforms from the company. These facts supports the position that beauty representatives are, in fact, employees, rather than independent contractors.

In addition, Mary Kay may have difficulty establishing Prong B above. Mary Kay Cosmetics holds itself out as providing beauty products and services to the general public. Mary Kay beauty consultants also provide beauty products and services to the general public. Thus, Mary Kay may not be able to prove that its representatives provide services of a different nature than those Mary Kay provides to the general public, and, therefore, under the law Mary Kay representatives would be employees.

Finally, under Prong C, Mary Kay would have to prove that its beauty consultants provide the same type of service that they provide for Mary Kay (selling beauty products and providing makeup services to the public) independently of their work for Mary Kay. Thus, if a Mary Kay representative works full time for Mary Kay and has no other job, she may be misclassified. Or, if the representative has another job, but it is in a different industry, she would also may be misclassified.

A business must prove all three of the above “prongs” to lawfully classify workers as independent contractors; if they fail on even just one of the prongs, they are in violation of the law.

Even if a beauty consultant signed an employment contract with Mary Kay that classifies her as an independent contractor, Mary Kay may still be in violation of the law. An employer cannot make an employee an independent contract just by requiring her to sign such a contract. What matters under the law is whether the three requirements of the independent contractor test have been met, regardless of what the employment contract and agreement states.

If an employer is found to have misclassified workers, the employer is liable for damages. This means that the employer is required to pay the misclassified employees the wages they would have received had they been properly classified as employees. This usually involves compensation for expenses of the company borne by the employer.

If you believe you have been misclassified as an independent contractor, feel free to contact us to confidentially discuss your situation and your rights with one of our employment law attorneys.